Such a combination of planning and flexibility will be crucial for nations to cope with the uncertainties of climate change, note Dr Joost Buurman, a senior research fellow at the Lee Kuan Yew School of Public Policy, and Dr Vladan Babovic, an associate professor at the National University of Singapore, in their recent research paper.

Titled Adaptation Pathways And Real Options Analysis: An Approach To Deep Uncertainty In Climate Change Adaptation Policies, the research paper proposes a new way to design climate change adaptation policies, based on the concepts of adaptation pathways, adaptive policymaking and real options analysis.

This new methodology will enable policymakers to create better climate change adaptation plans that can be improved over time in response to how the future unfolds, new information and changes in societal preferences.

Coping with uncertainty

Governments face a daunting task in planning for climate change. They have to deal with uncertain information on phenomena such as sea level rise along their coasts, changes in extreme rainfall events and the occurrence of droughts, among other issues.

The Intergovernmental Panel on Climate Change, for example, has projected a temperature rise of between 0.3 degree Celsius and 4.8 degree Celsius by the end of this century as compared to the beginning of the last century. Both extremes would result in very different outcomes.

To address such uncertainties, some policymakers have used adaptation pathways and adaptive policymaking to incorporate more flexibility into their climate change adaptation plans. The pathways are essentially series of predefined actions that are carried out when specific tipping points are reached.

For instance, policymakers may want their city's drainage network to be designed such that flooding is, on average, only allowed to occur once in 10 years. To climate-proof the network, they may assess its performance based on historical rainfall data and hydrological models, and develop solutions for when it can no longer meet the stated objective (the tipping point).

These solutions could include building a diversion canal or water detention tank, installing next-generation infrastructure (NGI) such as green roofs and porous pavements, and widening drains.

Each strategy has a different expiry date that will necessitate further action. A new diversion canal a very expensive solution may be sufficient for the next hundred years, while the other, cheaper solutions may require a switch to an additional strategy at an earlier tipping point. An adaptation pathways map would show the sequences of possible strategies, as shown below.

With such pathways, policymakers can think about different measures and strategies and make decisions over time. They can also focus on clear tipping points for example, a flood defence would no longer provide adequate protection if the sea level rises by one metre instead of analysing the impact of myriad climate change scenarios.

Adaptive policymaking, on the other hand, is a structured method for creating and evaluating policy plans and actions. While adaptation pathways lay out the tipping points and possible actions to be taken, adaptive policymaking consists of steps that guide policymakers in identifying those points and actions in the first place, among other things.

Flexibility for a better future

In their research paper, Buurman and Babovic combine the concepts of adaptive policymaking and adaptation pathways to propose a new eight-step framework, illustrated below, to help policymakers create flexible climate change adaptation plans. They also incorporate real options analysis in several of the steps.

In most cases, evaluations of public investments include cost-benefit analyses. Such analyses quantify in monetary value all of the consequences of a policy to all members of society.

Real options analyses go one step further by factoring in the value of flexibility: the fact that a different pathway can be taken, or that a policymaker can wait until more information is available, allows one to limit the cost of making a wrong decision, for instance building an expensive diversion canal that in hindsight would not have been required if climate change impacts are less severe, and take advantage of new information and opportunities.

After the proposed framework's design phase, for instance, a large number of adaptation pathways could exist, especially as individual options can recombine over time. After those with high costs and little benefits are eliminated, real options analysis can be used to assess the costs, benefits and value of flexibility for each of the remaining, viable pathways.

The framework can provide policymakers with more information about their options, including which actions can be taken now and which ones can be deferred. It can also be updated when new information emerges.

The traditional policymaking approach of focusing on the best estimates and scenarios of the future may lead to suboptimal system performances and flaws in the evaluation results. As shown in Singapore's drainage management, a strategy that allows for changes in case the future turns out differently than expected will lead to better policies and investments.